Identifying and Resolving Hospital and Insurer Liens Before Settlement Disbursement

Disclaimer: This article is for informational purposes only and does not constitute legal advice.

Detailed Answer

Before you disburse personal injury settlement funds in Georgia, you must identify and clear any hospital or insurer liens. If you ignore these liens, the lienholder can pursue you and your client for unpaid balances. Follow these steps under Georgia law:

1. Compile Medical Records and Billing Statements.

   Request complete medical records and itemized bills from every provider who treated the client. Cross-check dates, services, and amounts to spot potential lienholders.

2. Search the Clerk of Superior Court Lien Registry.

   Georgia hospitals must record liens in the superior court within 90 days of patient discharge under O.C.G.A. § 44-14-470. You or your investigator can query the courthouse docket or online registry to identify recorded liens. O.C.G.A. § 44-14-470.

3. Notify Insurers of Potential Subrogation.

   Group health plans and auto insurers often assert subrogation or reimbursement rights. Under O.C.G.A. § 33-24-56, insurers must assert and perfect these claims within one year of your client’s treatment. Send a written demand to each insurer, providing medical records, bills, and a copy of the settlement agreement. O.C.G.A. § 33-24-56.

4. Negotiate Lien Reductions or Waivers.

   Hospitals and insurers often accept less than the full billed amount. Present supporting evidence of comparative market rates, your client’s financial hardship, or the strength of liability. Secure any negotiated reductions in a signed lien waiver or release agreement.

5. Obtain Satisfied Lien Releases.

   Once payment is made, request a formal satisfaction of lien from each hospital or insurer. File the release with the Clerk of Superior Court to clear the title and ensure no future claims arise.

6. Hold Funds in Escrow.

   Retain the gross settlement in a trust or escrow account until all lien claims are resolved. Confirm in writing that each lienholder is paid or released before disbursing net proceeds to your client.

Helpful Hints

• Track deadlines: Georgia hospital liens must be filed within 90 days of discharge.
• Document every communication: Keep copies of notices, offers, and releases.
• Consult billing experts: They can spot overcharges and leverage reductions.
• Use clear trust accounting: Separate gross and net settlement amounts.
• Verify releases with the court: Ensure satisfaction is recorded publicly.
• Plan for contingencies: Allocate a reserve in case new liens surface post-settlement.